The following graph shows aggregate demand and short-run aggregate supply. Price level 1.) Use the line drawing tool to show the effect of an adjustment of workers and firms to a higher than expected price level. Properly label this line. SRASO 2.) Use the point drawing tool to show the new equilibrium price level and real GDP. Label this point 'B'. Carefully follow the instructions above, and only draw the required objects. Po ADO
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- The following graph shows aggregate demand and short-run aggregate supply. 1.) Use the line drawing tool to show the effect of expectations of an increase in the future price level Properly label this line. 2.) Use the point drawing tool to show the new equilibrium price level and real GDP Label this point 'B' Carefully follow the instructions above, and only draw the required objects. Price level Po A Real GDP (Y) SRAS ADOUsing aggregate demand and aggregate supply, graph the effects on the price level and GDP of each of the following. Draw a large graph and label all axes, initial and final equilibrium points, direction of shift if any, all curves and lines, equilibrium values on the x- and y-axes. State the conclusion in words. a. A cut in income taxes b. An increase in military spending c. A drop in export demand by foreign purchasers d. An increase in imports e. A decline in business investment spendingCreate a graph for an aggregate demand curve. Use the variable ‘Price Level’ for the vertical axis and ‘Real GDP’ for the horizontal axis. In your answer, explain why there is an inverse relationship between the price level and real GDP. Use your graph to illustrate your explanations. Also, discuss determinants of Aggregate Demandor factors that shift Aggregate Demand curve.
- What are the factors other than price that can shift aggregate demand curve interms of investment and consumption? Also explain graphically.Price Level AD2 LRAS AD, AD, PA W SRAS P, P2 P, Po Qo Q, Q, Q3 Real Domestic Output, GDP Refer to the above diagram. Assume aggregate demand increased from and the price AD1 to AD2. As a result of the shift, actual GDP levelA Moving to another question will save this response. Quèstion 25 AS2 AS AS3 e3 P3 AD Q2 Q, Q3 Real Domestic Output Refer to the graph. If aggregate supply shifts from AS1 to AS2, what will happen to price level and real domestic output? 4 For the toolbar, press ALT+F10 (PC) or ALT+FN+F10 (Mac). Paragraph ニv A 12pt Open Sans,sa... v BIUS Price Level !!!
- The graph to the right shows an economy's aggregate demand curve. Show the determination of the economy's long-run macroeconomic equilibrium by (i) using the Line tool to draw and label the long-run aggregate supply curve to show an equilibrium and (ii) using the Point tool to identify the equilibrium point. Label this point E. Price level Real GDP AD EThe following graph shows aggregate demand and short-run aggregate supply. 1.) Use the line drawing tool to show the effect of an increase in taxes. Properly label this line. 2.) Use the point drawing tool to show the new equilibrium price level and real GDP. Label this point 'B'. Carefully follow the instructions above, and only draw the required objects. C Price level A 0 Real GDP (Y) SRASO ADOPRICE LEVEL 160 150 140 130 120 110 100 90 80 0 с 1 d X a 2 3 4 5 REAL GDP (Trillions of dollars) 6 + 7 b H 8 (?) Identify which curve on the previous graph corresponds to each description in the following table. If the curve described does not appear on the graph, choose Not Shown. Description Short-run aggregate supply (SRAS) when there is a recessionary gap Aggregate demand (AD) Short-run aggregate supply (SRAS) when there is an inflationary gap Short-run aggregate supply (SRAS) when the economy is in long-run equilibrium Long-run aggregate supply (LRAS) a O b O O O с O O O O d O O Not Shown
- Assume an economy operates in the intermediate range of its aggregate supplycurve. For each of the following changes in conditions, state the direction of theeffect on: aggregate demand, aggregate supply, price level, real GDP.(a) A decrease in government expenditure in infrastructure(b) A severe recession occurs in a country which has been a major importer of thenation’s exports.(c) The federal government increases business taxes with diagramRefer to the figure to answer the following questions. Price level (P) O O B; E D; A F; E F; A LRAS D; C E A D B Based on the figure, starting at point A, if there is an increase in the price of oil, then in the short run we move to point_ and in the long run to point SRAS3 AD1 SRAS₁ SRAS2 AD2 Real GDP (Y)Price level (P) LRAS SRAS2 SRAS, В A AD2 AD, Real GDP (7) Based on the graph, a decrease in Point D to Point A could cause the economy to move from government spending exports on apples restrictions from the Environmental Protection Agency on car production in the U.S. inflation the demand for consumer goods Question 8 Suppose housing values fell during the recession of 2008. Therefore, O the price level will fall as the aggregate demand curve shifts to the left.